Autocad Does support transparency.
You have to have what is called an "alpha channel" in your image in order to have transparent background in Autocad.
To do so: in Photoshop, when you erase your background you have to hover over the layer icon (on the layer window) hold down the control key and left click on it in order to select the layers opacity. (You will notice that when over the icon and with the control key pressed, the hand cursor will have a small selection rectangle next to it). With the selection active, you have to switch to the Channels window, where you will find right down at the bottom frame of the window the button "save selection as channel". By pressing this (while the selection is active) you will create a new channel called "Alpha 1". This new channel will be a black and white image representing as black the background that you wish transparent, and white the opaque part of the image. Then you just have to save your image on a file format that supports alpha channels PNG, TIFF, TGA, but not JPG. PNG is the best because it is smaller than TIFF.
Then inside AutoCAD or any other AutoCAD vertical program (ADT/ACA) you have to activate the transparency option for the image. I send you exmpale of a PNG file with an aplha channel. just try it in Autocad it works.
hope this helps
regards
aghis
